Selling the status symbol

Surging gas prices have not slowed down Sacramento’s Sport Utility Vehicle drivers. They’re still enjoying their gas-guzzling beasts. Although the price of regular gasoline in the River City has hit an all-time high of $3.43 per gallon, according to the Automobile Association of America, few middle-class Sacramentans are ditching their large, steel-framed status symbols for more fuel-efficient models.

“Our [SUVs] are really doing well,” said Mark Rodriguez, sales manager for Future Ford of Sacramento. Rodriguez did note a general decline in total auto sales but no particular drop in SUV sales for Sacramento.

Nationally, domestic SUV sales have fallen off significantly from last year, with companies like General Motors reporting an almost 10 percent decrease from last April, according to Autodata Corp. Ford Motor Company wasn’t too far behind with a loss of nearly 6 percent from last year in its bread-and-butter light-truck divisions, which include SUVs.

And local dealers say that hybrids and other fuel-efficient automobiles, like those offered at the Florin Road Toyota dealership in Sacramento, are increasingly in demand as fuel prices rise.

“It seems the magic number is $3,” said Mark Fusselman, general sales manager at the Toyota dealership. “Whenever it goes past that number, our business is booming. [Gas prices] are definitely a concern for people.”

In addition to poor fuel economy, Fusselman said that buying a domestic SUV in today’s market could cost the buyer in other ways. For instance, reselling domestic SUVs presents a challenge when companies like GM and Ford offer generous incentives that, in many cases, render new sport utilities cheaper than slightly used ones, he explained.

For example, a brand new 2007 Ford Explorer XLT costs around $25,000. A used 2006 SUV of the same model in good condition goes for around $22,000, according to the Kelley Blue Book. But if you throw in $2,500 cash back and zero percent financing that comes with the newer model, the 2007 Explorer with its brand new warranty is a better deal.

“It makes it very difficult to get out of these vehicles. In some cases it’s better for them to ride out the higher fuel costs,” Fusselman said.

Recently, Robert Lutz, GM’s vice chairman for global product development, was quoted as saying that Americans are not likely to pursue smaller fuel-efficient vehicles until gas prices hit $6 a gallon, as they have in Europe.

It appears that SUV owners in Sacramento agree with Lutz’s assessment.

Within the Sacramento classifieds, a wide variety of SUVs are for sale—and for an even wider variety of reasons. But only two or three of the more than 20 private sellers interviewed by SN&R identified high gas prices as one reason for selling their SUVs.

“It’s purely financial,” said Dave Stewart, who was trying to unload his Hummer H2 through the Sacramento Bee classifieds. “It has nothing to do with gas prices.”

Other private owners echoed similar motivations.

“I have two cars, and I don’t need one,” said Mary Brownley-Wesson, who was trying to get rid of her Ford Explorer. “It actually does pretty well on gas.”

Then there’s Justin Starr, who was unloading his 2003 Chevy Tahoe for a more robust pickup truck to accommodate his many trips to Lake Tahoe. “The Tahoe wasn’t four-wheel drive and I do a lot of snowboarding,” Starr said.

“I don’t think gas prices have much to do with it,” said Kevin Bowers, general manager of Performance Chevrolet on Madison Avenue. “We do very well with our SUVs. I think sales have declined for everyone.” He sees Sacramento’s ailing housing market as the reason for the slide in local commercial-vehicle sales, including SUVs.

“When the contractors aren’t building houses, they ain’t buying commercial vehicles,” Bowers said. Despite the slow down, he believes that loyal SUV owners will continue to seek these spacious vehicles—no matter the fuel prices. “The people that need these SUVs are still going to buy them.”

But rising gas prices have persuaded at least one couple to ditch their SUV. Jim Joseph Mora is selling his 13 mpg utility vehicle for a Toyota Camry hybrid, which he and his wife purchased on Earth Day.

Mora was spending nearly $125 per week in gas with a light travel schedule. His new hybrid, in contrast, has traveled 345 miles and still has a little less than half a tank left.

“I will never buy another Chevrolet,” Mora said.